Wind power is now the cheapest electricity to produce in both Germany and the UK, even without government subsidies. It’s the first time that threshold has been crossed by a G7 economy.
Once a solar or wind project is built, the cost of an extra watt of electricity is pretty much zero, free electricity. Whereas coal and gas plants require more fuel for every new watt produced. If you’re a power company with a choice, you choose to run the renewable plant to get free power, so fossil fuel plants are now being run less – and this makes them more expensive to run.
This is setting up a virtuous self-reinforcing feedback loop in which:
. the more wind and solar power is installed,
. the more coal and gas plants sit idle so
. the higher the costs of the coal and gas power, so back to the top of this loop
. the more wind and solar power is installed and so on
Now anyone contemplating a billion-dollar fossil fuel power plant with an anticipated lifespan of decades must consider the possibility that as time goes on, the plant will be used less and less. Coal-fired and gas-fired electricity is becoming more expensive and the profits less predictable.
Sydney Morning Herald: 7 Oct 2015
Key Words: Climate Change, technology, economics
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